China's exports unexpectedly declined.

China's exports in March fell 7.5% year-on-year, the largest decline since August 2023.

This rate is also higher than the 2.3% decline forecast in a Reuters poll of economists . In the first two months of the year, China's exports still grew by 7.1%.

Meanwhile, imports also fell by 1.9%. As a result, the trade surplus of the world's second-largest economy reached $58.55 billion in March, compared to $125 billion in the first two months of the year.

Exports fell partly due to a high comparison base, having risen 14.8% year-on-year after the Chinese economy reopened post-pandemic. Zichun Huang, a China economist at Capital Economics, suggests that slower export growth this year is due to cooling consumer spending in advanced economies and the fading benefits from last year's sharp drop in export prices.

The Chinese economy has had a relatively solid start this year after policymakers introduced supportive measures to revive consumption, private investment, and market confidence since the second half of 2023.

A view of Lianyungang, Jiangsu province, China, on February 12. Photo: AFP — A view of Lianyungang, Jiangsu province, China, on February 12. Photo: *AFP*

However, growth remains uneven, and analysts do not expect a full recovery anytime soon, mainly due to the prolonged real estate crisis. A Reuters poll forecasts the country's economy will grow 4.6% in the first quarter. This year, China aims for a 5% GDP growth.

Bruce Pang, Chief Economist at JLL, believes that beyond the challenges of exchange rate volatility, the weak import-export figures in March indicate that Beijing needs more comprehensive and targeted policy stimulus measures. "It will take a long time for China's foreign trade to once again provide growth momentum," he said.

There are concerns that China might seek to increase exports to help meet its growth targets. However, according to Ms. Huang, the country's exporters have been lowering prices to boost sales in recent times. With increasing losses, the likelihood of them further price reductions is diminishing.

Meanwhile, China is working to stimulate domestic demand. It plans to issue 1 trillion yuan ($138.18 billion) of special ultra-long-term treasury bonds to support key sectors. It also increased the 2024 quota for issuing special bonds to local governments to 3.9 trillion yuan from 3.8 trillion yuan in 2023.

Last month, the cabinet approved a large-scale equipment upgrade plan and a stimulus package to boost consumption. This plan is estimated to generate over 5 trillion yuan in market demand annually. The country's March Purchasing Managers' Index (PMI) survey showed manufacturing activity expanding for the first time in six months.

Phiên An ( according to Reuters, AP )

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